Whether you have medical insurance through your employer or you are self-insured, you know that health insurance is expensive. Both premiums and deductibles have skyrocketed in recent years. Those that struggle to afford the cost of escalating premiums are entitled to assume that they are paying for the security of adequate medical care if they should become ill and require medical treatment or hospitalization.

Tragically, some people who become ill find that their health insurance carrier refuses to provide coverage for covered procedures. A settlement of particularly egregious cases in California involving Blue Shield serves as a glaring example of the problem. Blue Shield settled a case in which it was accused of dropping ill policyholders that needed costly medical treatments. Blue Shield agreed to pay $2 million in the wake of an investigation by the Los Angeles City Attorney Carmen Trutanich. The findings of the investigation concluded that Blue Shield exercised the so-called practice of “rescission” of over a thousand health insurance policies of those who became seriously ill.

The actions of Blue Shield in this case are a symptom of an increasingly prevalent practice by medical insurance companies to avoid covering the cost of expensive medical treatments when its customers become seriously ill. The insurance industry defends the practice known in the industry as “rescission.” Insurers claim that the practice is a legitimate means to combat fraud by policyholders that fail to disclose pre-existing conditions. However, a series of articles in the L.A. Times indicate that legislative hearings, lawsuits and regulatory investigations have revealed that health insurance companies often rescind coverage where there is no evidence that an insured intended to deceive its insurance company about pre-existing conditions. Health insurance companies may rely on obscure bits of a policyholder’s medical history that are unrelated to the policyholder’s claim.

One health insurance rescission lawsuit that has been litigated to a judgment resulted in a $9 million verdict against Health-Net in 2008. The company rescinded health insurance coverage after the insured learned that she had breast cancer. Evidence of the type of bad faith conduct by the insurer was reportedly reflected in the insurance provider’s policy of paying bonuses to employees based in part on the number of rescissions.

The practice of rescinding health insurance became so prevalent that it peaked at 5,000 per year in California alone. Obama’s healthcare bill targeted the unethical practice by making a ban on rescissions for inadvertent mistakes one of the first parts of Obamacare to take effect in September 2010.

Unfortunately, the legality of the practice of rescission of health insurance policies may have little impact on the trend of insurance companies to deny legitimate claims. There are many other bad faith insurance practices that health insurance companies may employ to deny, undervalue or delay providing valid coverage. If you have been paying health insurance premiums but your health insurance company refuses to cover costly medical procedures, our experienced Atlanta personal injury law firm may be able to help you obtain the coverage for which you paid premiums. We may even be able to file a lawsuit for insurance bad faith and seek punitive damages against your health insurance company.

Our Atlanta personal injury attorneys are available to assist clients throughout all of Georgia and the Southeast, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state. No matter where you are located our attorneys are just a phone call away, and we will even come to you. Call us 24 hours a day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333). You can also visit us online at www.montlick.com and use our Free Case Evaluation Form or 24-hour Live Online Chat.

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Please Note:Many of our blog articles discuss the law. All information provided about the law is very general in nature and should not be relied upon as legal advice. Every situation is different, and should be analyzed by a lawyer who can provide individualized advice based on the facts involved in your unique situation, and a consideration of all of the nuances of the statutes and case law that apply at the time.